Innolux to delay production at new LCD plant- paper

TAIPEI Sat Dec 27, 2008 3:15am GMT

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TAIPEI Dec 27 (Reuters) - Taiwan's Innolux Display Corp (3481.TW), the world's No.2 LCD monitor maker, will delay production at its new LCD panel plant by a quarter due to weaker demand, a local newspaper reported on Saturday.

Innolux's sixth-generation factory would start producing panels from the third quarter of next year as it would delay moving in equipments to the plant by two to three months, the Commercial Times quoted unnamed sources as saying.

Innolux originally planned to start making panels from the second quarter of next year, the Chinese-language paper said. Innolux is a display unit of Taiwan's top electronics gear maker Hon Hai Precision Industry Co (2317.TW).

The Innolux spokesman was not available for comment. THe company has cut its forecast on the new LCD plant's monthly capacity to 60,000 units from 90,000 units.

Taiwan's AU Optronics Corp (2409.TW) (AUO.N), the world's third-largest LCD panel maker, scaled back production activity earlier this month, in a sign of trouble for LCD makers amid slowing demand for PCs and flat-screen TVs.

A slowing economy has forced most consumers to cut spending on new computers, mobile phones and flat-screen TVs, which has also pushed down prices of some key components such as liquid crystal displays (LCDs) and chips.

Unlike bigger pure-panel rivals in Taiwan, Innolux is the only local LCD screen maker that assembles LCD monitors for top PC vendors, including Dell Inc DELL.O, Hewlett-Packard Co (HPQ.N) and Acer Inc (2353.TW).

On Friday, Innulox shares jumped 4.7 percent and AU shares rose 2.5 percent, outpacing the main TAIEX's .TWII 0.3 percent gain. (US$1=T$33) (Reporting by Baker Li, Editing by Kazunori Takada)